NEW YORK Nov 15 Fewer U.S. homeowners were
behind on mortgage payments in the third quarter as the housing
market recovery made progress, data from an industry group
showed on Thursday.
The seasonally adjusted delinquency rate on all loans fell
to 7.40 percent from 7.58 percent in the second quarter and was
down from 7.99 percent a year ago, according to a report from
the Mortgage Bankers Association.
The delinquency rate includes loans that are at least one
payment behind but are not yet in the foreclosure process.
The drop was driven by an improvement in the number of
homeowners that were 90 days or more behind on payments, which
fell to 2.96 percent from 3.19 percent. It was the lowest level
"These loans are working their way through the process,"
said Mike Fratantoni, MBA's vice president of research and
"That's being helped by the continued economic growth and
job growth we've had, (and) by what looks like a real turn
around in the housing market."
The serious delinquency rate, which is the percentage of
loans that are 90 days or more past due or in foreclosure, fell
to 7.03 percent from 7.31. That was also well off the previous
year's 7.89 percent.
Still, loans that were 30 days past due rose to 3.25 percent
from 3.18 percent, and 3.19 percent a year ago.
The number of loans in foreclosure at the end of the quarter
fell to 4.07 percent from 4.27 percent in the biggest quarterly
drop on record. It was also down from 4.43 percent a year ago.
Even with the drop, the level is still about four times the
long-run average, MBA said.
The decline in both the foreclosure inventory and the number
of loans that were at least 90 days behind indicates a
significant drop in the so-called shadow inventory of distressed
homes that could end up in foreclosure, said Fratantoni.
"It will increase confidence that we're not going to get
another wave of distressed properties hitting the market," which
should instead go up for sale at a steady pace, Fratantoni said.
Differences in the way states handle foreclosures continued
to show a stark divide between those that use the court system
and those that do not. The foreclosure rate in judicial states
stood at 6.6 percent, while it was just 2.4 percent in
The difference between the rates was the widest since MBA
started tracking it in 2006.
On a seasonally adjusted basis, 0.86 percent of loans saw
foreclosure actions started, down from 1.03 percent in the prior
quarter and 1.04 percent a year before.